Does it?

[drone]

Ok. I just check that watch tower does not affect the economy. It however improves loyalty. It seems that loyalty doesn't affect economy!

Indirectly, it does. The more loyal the province, the higher you can raise the taxes. You generally want to keep province loyalty above 120%, there are many different ways to affect province loyalty and lowering taxes is one big way to do it. But that comes at an economic cost.

Watchtowers give +20% loyalty, forts give a bonus as well but I'm not sure how big it is.

[Goalum]

Indirectly, it does. The more loyal the province, the higher you can raise the taxes. You generally want to keep province loyalty above 120%, there are many different ways to affect province loyalty and lowering taxes is one big way to do it. But that comes at an economic cost.

Watchtowers give +20% loyalty, forts give a bonus as well but I'm not sure how big it is.

watchtowers and border forts iirc give cumulatively +50%[+20% and +30%].. after that its the town watch that gives some iirc and then its the church/mosque..

Acumen of the governor increases/decreases the province's wealth, and acumen of the King is applied to the whole kingdom income if memory serves..

If you keep the governor within the province while you make improvements to it - instead of him being away - he'll get traits from the improvements you build further adding to province productivity/wealth..